The Determinants of Provincial Public Health Expenditures in Turkey: Evidence from a Spatial Data Analysis

This paper assesses the determinants of provincial public health expenditures for Turkey, taking spatial dimension into account. A general-to-specific approach has been adopted where spatial variations in the relationships have been examined, using the panel data at NUTS3 level for the period 2009-2019. Descriptive spatial exploratory analysis indicates the existence of a significant positive spatial association for provincial GDP per capita, health expenditures, and other explanatory variables. However, the traditional East-West divide shows persistence in income and health indicators. Our empirical results indicate that there is positive spatial interaction with regard to provincial health expenditures. This result corroborates the externality effect of government expenditures. Our results also show the presence of strong path dependency, implying long-term policy stability. According to our findings, it seems that age structure, education level, and urbanization are important determinants of public health expenditures with significant spatial effects. Overall, our empirical results do not support the supply-induced demand theory, but rather indicate that demand side factors are more prominent determinants of central public health expenditures.